Access the Q3 earnings teleconference scheduled for 10:00 a.m.
Eastern Time on July 22 by calling 719-325-4770 and entering
passcode 3814248, or listen on the Web at:
www.airproducts.com/Invest/financialnews/Earnings_Releases/Teleconference.htm.
LEHIGH VALLEY, Pa., July 22 /PRNewswire-FirstCall/ -- Air Products
(NYSE: APD) today reported income from continuing operations of
$115 million, or diluted earnings per share (EPS) from continuing
operations of $0.54, for its fiscal third quarter ended June 30,
2009. These results included charges of $110 million, or $0.51 per
share, for the company's global cost reduction plan, a customer
bankruptcy and other asset actions, and a pension settlement.
Excluding the impact of these items, income from continuing
operations was $225 million, and diluted EPS was $1.05, down 24 and
22 percent, respectively, compared with the prior year.
Approximately three-quarters of the fiscal third quarter global
cost reduction plan is for severance and pension costs related to
the elimination of approximately 1,150 positions from the company's
global workforce. These reductions are targeted at continued cost
and productivity efforts, including closure of certain
manufacturing facilities. The remainder is for a write-down of
certain assets held for sale to net realizable value. The global
cost reduction plan is expected to reduce fixed costs by
approximately $30 million in fiscal 2010, with annual benefits of
$50 million in fiscal 2011 and beyond. The discussion of third
quarter results in this release is based on non-GAAP comparisons.
It excludes the impacts of the above items. A reconciliation can be
found at the end of this release.* Third quarter revenues of $1,976
million decreased 28 percent from the prior year on weaker volumes,
lower energy and raw material cost pass-throughs, and unfavorable
currency. Underlying sales were down 11 percent. Operating income
of $308 million declined 22 percent from the prior year on weaker
volumes and unfavorable currency impacts, partially offset by lower
operating and overhead costs. John McGlade, chairman, president and
chief executive officer, said, "While we are still seeing the
impact of the global recession on our volumes, we've seen signs of
improvement during this quarter in some of our end markets,
particularly in Electronics and Asia. The productivity and
continuous improvement efforts of our employees are having an
impact, as margins improved substantially both sequentially and
versus prior year." Third Quarter Segment Performance -- Merchant
Gases sales of $883 million declined 19 percent from the prior year
on weaker volumes across manufacturing end-markets globally and
unfavorable currency, partially offset by favorable pricing.
Operating income of $169 million declined 17 percent from the prior
year on weaker volumes and unfavorable currency, partially offset
by favorable pricing and cost performance. -- Tonnage Gases sales
of $565 million were down 42 percent from the prior year,
principally on lower energy and raw material cost pass-throughs,
and to a lesser extent, weaker volumes in steel and chemical
end-markets and unfavorable currency. Operating income of $88
million decreased 30 percent on weak volumes, customer outages,
lower operating efficiencies, and unfavorable currency. --
Electronics and Performance Materials sales of $409 million
declined 29 percent and operating income of $39 million decreased
45 percent from the prior year on significantly lower volumes.
While Electronics sales increased 21 percent sequentially due to
improved customer run rates, year-on-year sales were down 35
percent. Performance Materials volumes improved 26 percent
sequentially, reflecting seasonal improvement and stronger Asian
sales, but declined 23 percent from the prior year on weaker demand
from coatings, autos, housing and other end markets. -- Equipment
and Energy sales of $119 million were up 12 percent over the prior
year on higher air separation unit activity. Operating income of
$13 million increased from the prior year on favorable cost
performance. Outlook McGlade said, "The global recession remains
challenging; however, we believe the actions we are taking to drive
improvement in costs are positioning the company for continued
margin improvement. We are focused on and remain committed to
achieving our 17 percent margin goal." Air Products now expects
fourth quarter EPS from continuing operations to be between $1.04
and $1.14 per share and full-year EPS from continuing operations to
be between $3.95 and $4.05 per share, excluding the impact of
disclosed items in the fiscal first and third quarters. Air
Products (NYSE:APD) serves customers in industrial, energy,
technology and healthcare markets worldwide with a unique portfolio
of atmospheric gases, process and specialty gases, performance
materials, and equipment and services. Founded in 1940, Air
Products has built leading positions in key growth markets such as
semiconductor materials, refinery hydrogen, home healthcare
services, natural gas liquefaction, and advanced coatings and
adhesives. The company is recognized for its innovative culture,
operational excellence and commitment to safety and the
environment. In fiscal 2008, Air Products had revenues of $10.4
billion, operations in over 40 countries, and 21,000 employees
around the globe. For more information, visit
http://www.airproducts.com/. NOTE: The information above contains
"forward-looking statements," within the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995, including
earnings guidance for the fourth quarter and full year. These
forward-looking statements are based on management's reasonable
expectations and assumptions as of the date of this press release.
Actual performance and financial results may differ materially from
projections and estimates expressed in the forward-looking
statements because of many factors, including, without limitation,
longer than anticipated delay in global economic recovery; renewed
deterioration in economic and business conditions; weakening demand
for the Company's products, future financial and operating
performance of major customers and industries served by the
Company; unanticipated contract terminations or customer
cancellations or postponement of projects and sales; asset
impairments due to economic conditions or specific product or
customer events; the impact of competitive products and pricing;
interruption in ordinary sources of supply of raw materials; the
ability to recover unanticipated increased energy and raw material
costs from customers; costs and outcomes of litigation or
regulatory activities; consequences of acts of war or terrorism
impacting the United States' and other markets; the effects of a
pandemic or epidemic or a natural disaster; charges related to
current portfolio management and cost reduction actions; the
success of implementing cost reduction programs and achieving
anticipated acquisition synergies; the timing, impact, and other
uncertainties of future acquisitions or divestitures; significant
fluctuations in interest rates and foreign currencies from that
currently anticipated; the continued availability of capital
funding sources in all of the Company's foreign operations; the
impact of new or changed environmental, healthcare, tax or other
legislation and regulations in jurisdictions in which the Company
and its affiliates operate; the impact of new or changed financial
accounting standards; and the timing and rate at which tax credits
can be utilized and other risk factors described in the Company's
Form 10K for its fiscal year ended September 30, 2008 and Form 10-Q
for the quarter ended December 31, 2008. The Company disclaims any
obligation or undertaking to disseminate any updates or revisions
to any forward-looking statements contained in this document to
reflect any change in the Company's assumptions, beliefs or
expectations or any change in events, conditions or circumstances
upon which any such forward-looking statements are based. *The
presentation of non-GAAP measures is intended to enhance the
usefulness of financial information by providing measures which the
Company's management uses internally to evaluate the Company's
baseline performance. Presented below is a reconciliation of
reported GAAP results to non-GAAP measures. Continuing Operations
Q3 Q3 Q3 Q4 YTD Operating Income Diluted Diluted Diluted Income EPS
EPS EPS 2009 GAAP $143.8 $114.6 $.54 2008 GAAP 393.7 295.0 1.35 %
Change GAAP (63)% (61)% (60)% 2009 GAAP $143.8 $114.6 $.54 Global
cost reduction plan 124.0 84.2 .39 Customer bankruptcy and asset
actions 32.1 21.0 .10 Pension settlement 8.0 5.0 .02 2009 Non-GAAP
Measure $307.9 $224.8 $1.05 % Change Non-GAAP Measure (22)% (24)%
(22)% 2009 Forecast GAAP $1.04-$1.14 $2.89-$2.99 Global cost
reduction plan .94 Customer bankruptcy and asset actions .10
Pension settlement .02 2009 Forecast Non-GAAP Measure $1.04-$1.14
$3.95-$4.05 AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
CONSOLIDATED INCOME STATEMENTS (Unaudited) Three Months Ended Nine
Months Ended 30 June 30 June (Millions of dollars, except for share
data) 2009 2008 2009 2008 ---- ---- ---- ---- SALES $1,976.2
$2,749.7 $6,126.9 $7,699.8 Cost of sales 1,427.5 2,041.1 4,497.1
5,666.3 Selling and administrative 232.3 284.4 709.9 815.0 Research
and development 24.1 33.1 86.9 97.7 Global cost reduction plan
124.0 -- 298.2 -- Customer bankruptcy 22.2 -- 22.2 -- Pension
settlement 8.0 1.0 8.0 28.7 Other income, net 5.7 3.6 13.7 30.6 ---
--- ---- ---- OPERATING INCOME 143.8 393.7 518.3 1,122.7 Equity
affiliates' income 28.5 46.5 80.0 114.2 Interest expense 27.5 39.5
94.0 119.2 ---- ---- ---- ----- INCOME FROM CONTINUING OPERATIONS
BEFORE TAXES AND MINORITY INTEREST 144.8 400.7 504.3 1,117.7 Income
tax provision 25.4 98.1 99.0 282.4 Minority interest in earnings of
subsidiary companies 4.8 7.6 11.4 18.2 --- --- ---- ---- INCOME
FROM CONTINUING OPERATIONS 114.6 295.0 393.9 817.1 LOSS FROM
DISCONTINUED OPERATIONS, net of tax (1.4) (224.9) (6.5) (169.0)
---- ------ ---- ------ NET INCOME $113.2 $70.1 $387.4 $648.1
====== ===== ====== ====== BASIC EARNINGS PER COMMON SHARE Income
from continuing operations $.55 $1.40 $1.88 $3.84 Loss from
discontinued operations (.01) (1.07) (.03) (.79) ---- ----- ----
---- Net Income $.54 $.33 $1.85 $3.05 ---- ---- ----- ----- DILUTED
EARNINGS PER COMMON SHARE Income from continuing operations $.54
$1.35 $1.85 $3.72 Loss from discontinued operations (.01) (1.03)
(.03) (.77) ---- ----- ---- ---- Net Income $.53 $.32 $1.82 $2.95
---- ---- ----- -----WEIGHTED AVERAGE OF COMMON SHARES OUTSTANDING
(in millions) 209.8 211.2 209.6 212.8 ----- ----- ----- -----
WEIGHTED AVERAGE OF COMMON SHARES OUTSTANDING ASSUMING DILUTION (in
millions) 214.0 218.2 212.8 219.9 ----- ----- ----- ----- DIVIDENDS
DECLARED PER COMMON SHARE - Cash $.45 $.44 $1.34 $1.26 ---- ----
----- ----- Other Data from Continuing Operations: Depreciation and
amortization $217.1 $219.7 $614.8 $647.8 Capital expenditures on a
non-GAAP Basis (a) 356.1 309.0 1,041.8 948.3 (a) See reconciliation
table. AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited) 30 June 30 September
(Millions of dollars) 2009 2008 ---- ---- ASSETS CURRENT ASSETS
Cash and cash items $70.3 $103.5 Trade receivables, less allowances
for doubtful accounts 1,332.6 1,575.2 Inventories 495.8 503.7
Contracts in progress, less progress billings 115.3 152.0 Prepaid
expenses 96.0 107.7 Other receivables and current assets 445.6
349.4 Current assets of discontinued operations 15.5 56.6 ---- ----
TOTAL CURRENT ASSETS 2,571.1 2,848.1 ------- -------INVESTMENT IN
NET ASSETS OF AND ADVANCES TO EQUITY AFFILIATES 820.6 822.6 PLANT
AND EQUIPMENT, at cost 15,254.7 14,988.6 Less accumulated
depreciation 8,579.7 8,373.8 ------- ------- PLANT AND EQUIPMENT,
net 6,675.0 6,614.8 ------- -------GOODWILL 872.7 928.1 INTANGIBLE
ASSETS, net 251.4 289.6 NONCURRENT CAPITAL LEASE RECEIVABLES 569.4
505.3 OTHER NONCURRENT ASSETS 478.9 504.1 NONCURRENT ASSETS OF
DISCONTINUED OPERATIONS 4.4 58.7 --- ---- TOTAL ASSETS $12,243.5
$12,571.3 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES Payables and accrued liabilities $1,299.7
$1,665.6 Accrued income taxes 84.7 87.0 Short-term borrowings 385.6
419.3 Current portion of long-term debt 3.8 32.1 Current
liabilities of discontinued operations 19.0 8.0 ---- --- TOTAL
CURRENT LIABILITIES 1,792.8 2,212.0 ------- ------- LONG-TERM DEBT
3,755.8 3,515.4 DEFERRED INCOME & OTHER NONCURRENT LIABILITIES
1,040.7 1,049.2 DEFERRED INCOME TAXES 591.0 626.6 NONCURRENT
LIABILITIES OF DISCONTINUED OPERATIONS .3 1.2 -- --- TOTAL
LIABILITIES 7,180.6 7,404.4 ------- ------- MINORITY INTEREST IN
SUBSIDIARY COMPANIES 134.6 136.2 ----- ----- TOTAL SHAREHOLDERS'
EQUITY 4,928.3 5,030.7 ------- ------- TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $12,243.5 $12,571.3 ========= ========= AIR
PRODUCTS AND CHEMICALS, INC. and Subsidiaries CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited) Nine Months Ended 30 June
(Millions of dollars) 2009 2008 ---- ---- OPERATING ACTIVITIES Net
income $387.4 $648.1 Adjustments to reconcile income to cash
provided by operating activities: Depreciation and amortization
614.8 647.8 Impairment of assets of continuing operations 67.7 --
Impairment of assets of discontinued operations 48.7 314.8 Loss
(gain) on sale of discontinued operations .6 (119.5) Deferred
income taxes (41.6) (69.6) Customer bankruptcy 22.2 --
Undistributed earnings of unconsolidated affiliates (45.5) (59.6)
Loss (gain) on sale of assets and investments 7.0 (.4) Share-based
compensation 45.1 47.1 Noncurrent capital lease receivables (74.9)
(160.5) Other adjustments (38.5) 82.7 Working capital changes that
provided (used) cash, excluding effects of acquisitions and
divestitures: Trade receivables 160.0 (195.9) Inventories (10.8)
(39.5) Contracts in progress 29.8 84.8 Other receivables 16.1 (3.7)
Payables and accrued liabilities (313.2) (20.7) Other working
capital (17.7) (26.4) ----- ----- CASH PROVIDED BY OPERATING
ACTIVITIES (a) 857.2 1,129.5 ----- ------- INVESTING ACTIVITIES
Additions to plant and equipment (899.3) (791.4) Acquisitions, less
cash acquired (29.8) (2.0) Investment in and advances to
unconsolidated affiliates (1.1) (1.8) Proceeds from sale of assets
and investments 30.1 18.4 Proceeds from sale of discontinued
operations 39.0 419.5 Change in restricted cash 82.2 (135.6) Other
investing activities -- (17.8) --- ----- CASH USED FOR INVESTING
ACTIVITIES (778.9) (510.7) ------ ------ FINANCING ACTIVITIES
Long-term debt proceeds 120.9 479.8 Payments on long-term debt
(70.0) (96.7) Net increase (decrease) in commercial paper and
short-term borrowings 99.2 (236.0) Dividends paid to shareholders
(278.8) (256.1) Purchase of treasury stock -- (560.2) Proceeds from
stock option exercises 14.9 80.9 Excess tax benefit from
share-based compensation/other 4.1 50.1 --- ---- CASH USED FOR
FINANCING ACTIVITIES (109.7) (538.2) ------ ------ Effect of
Exchange Rate Changes on Cash (1.8) 5.1 ---- --- (Decrease)
increase in Cash and Cash Items (33.2) 85.7 Cash and Cash Items -
Beginning of Year 103.5 40.5 ----- ---- Cash and Cash Items - End
of Period $70.3 $126.2 ===== ====== (a) Pension plan contributions
$169.5 $123.0 AIR PRODUCTS AND CHEMICALS, INC. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Millions of
dollars) 1. GLOBAL COST REDUCTION PLAN Third Quarter 2009 During
the third quarter ended 30 June 2009, due to the continuing slow
economic recovery, the Company committed to additional actions
associated with its global cost reduction plan which resulted in a
charge to continuing operations of $124.0 ($84.2 after-tax, or $.39
per share). This charge included $90.0 for severance and other
benefits, including pension-related costs, associated with the
elimination of approximately 1,150 positions of its global
workforce. The reductions are targeted at continued cost reduction
and productivity efforts, including the closure of certain
manufacturing facilities. An impairment charge of $34.0 was
recorded to write-down certain assets held for sale to net
realizable value. The planned actions associated with the third
quarter charge are expected to be substantially completed by the
end of the third quarter of fiscal year 2010. First Quarter 2009
During the first quarter ended 31 December 2008, the Company
announced a global cost reduction plan designed to lower its cost
structure and better align its businesses to reflect rapidly
declining economic conditions around the world. The results from
continuing operations in the first quarter included a charge of
$174.2 ($116.1 after-tax, or $.55 per share). This charge included
$120.0 for severance and pension-related costs, associated with
eliminating approximately 1,400 positions from its global
workforce. The reductions are targeted at reducing overhead and
infrastructure costs, reducing and refocusing elements of the
Company's technology and business development spending, and
lowering its plant operating costs. The remainder of this charge,
$54.2, was for business exits and asset management actions. Assets
held for sale were written down to net realizable value and an
environmental liability of $16.0 was recognized. This environmental
liability resulted from a decision to sell a production facility.
The planned actions associated with the first quarter 2009 charge
are expected to be substantially completed by the end of the first
quarter of fiscal year 2010. 2. DISCONTINUED OPERATIONS The U.S.
Healthcare business, Polymer Emulsions business, and the High
Purity Process Chemicals (HPPC) business have been accounted for as
discontinued operations. The results of operations of these
businesses have been removed from the results of continuing
operations for all periods presented. For additional historical
information on these discontinued operations, refer to the
Company's 2008 annual report on Form 10-K. U.S. Healthcare In July
2008, the Board of Directors authorized management to pursue the
sale of the U.S. Healthcare business. In 2008, the Company recorded
a total charge of $329.2 ($246.2 after-tax, or $1.12 per share)
related to the impairment/write-down of the net carrying value of
the U.S. Healthcare business. In the first quarter of 2009, based
on additional facts, the Company recorded an impairment charge of
$48.7 ($30.9 after-tax, or $.15 per share) reflecting a revision in
the estimated net realizable value of the U.S. Healthcare business.
Also, a tax benefit of $8.8, or $.04 per share, was recorded to
revise the estimated tax benefit related to previously recognized
impairment charges. As a result of events which occurred during the
second quarter of 2009, which increased the Company's ability to
realize tax benefits associated with the impairment charges
recorded in 2008, the Company recognized a one-time tax benefit of
$16.7, or $.08 per share. During the third quarter of 2009, the
Company sold more than half of its remaining U.S. Healthcare
business to OptionCare Enterprises, Inc., a subsidiary of Walgreen
Co., and Landauer-Metropolitan, Inc. (LMI) for cash proceeds of
$38.1. The Company recognized an after-tax gain of $.3 resulting
from these sales combined with adjustments to the net realizable
value of the remaining businesses. The Company expects to conclude
the sale of the remaining portions of this business in 2009. The
operating results of the U.S. Healthcare business have been
classified as discontinued operations and are summarized below:
Three Months Nine Months Ended Ended 30 June 30 June 2009 2008 2009
2008 ---- ---- ---- ---- Sales $25.2 $58.3 $117.3 $187.1 Loss
before taxes $(3.4) $(326.2) $(3.2) $(345.4) Income tax benefit
(1.3) (82.0) (1.2) (89.3) ---- ----- ---- ----- Loss from
operations of discontinued operations $(2.1) $(244.2) $(2.0)
$(256.1) Income (loss) on sale of businesses and
impairment/write-down to estimated net realizable value, net of tax
.3 -- (4.8) -- -- --- ---- --- Loss from discontinued operations,
net of tax $(1.8) $(244.2) $(6.8) $(256.1) ===== ======== =====
======= Polymer Emulsions Business On 31 January 2008, the Company
sold its Polymer Emulsions business to Wacker Chemie AG, its
long-time joint venture partner. The Company recognized a gain on
the sale of $89.5 ($57.7 after-tax). On 30 June 2008, the Company
sold its Elkton, Md. and Piedmont, S.C. production facilities and
the related North American atmospheric emulsions and global
pressure sensitive adhesives businesses to Ashland Inc. The Company
recorded a gain of $30.5 ($18.5 after-tax) in connection with the
sale, which included the recording of a retained environmental
obligation associated with the Piedmont site. The sale of the
Elkton and Piedmont facilities completed the disposal of the
Company's Polymer Emulsions business. The operating results of the
Polymer Emulsions business have been classified as discontinued
operations and are summarized below: Three Months Nine Months Ended
Ended 30 June 30 June 2009 2008 2009 2008 ---- ---- ---- ---- Sales
$-- $31.4 $-- $261.4 --- ----- --- ------ Income before taxes $--
$1.9 $-- $17.5 Income tax provision -- .8 -- 6.3 --- -- --- ---
Income from operations of discontinued operations $-- $1.1 $--
$11.2 Gain on sale of business, net of tax .4 18.5 .4 76.2 -- ----
-- ---- Income from discontinued operations, net of tax $.4 $19.6
$.4 $87.4 === ===== === ===== HPPC Business In the first quarter of
2008, the HPPC business generated sales of $22.9 and income from
operations, net of tax, of $.2. The Company closed on the sale of
its HPPC business on 31 December 2007. 3. CUSTOMER BANKRUPTCY AND
ASSET ACTIONS As a result of events which occurred during the third
quarter of 2009, the Company recognized a $22.2 charge primarily
for the write-off of certain receivables due to a customer
bankruptcy. This customer, who principally receives product from
the Tonnage Gases segment, began operating under Chapter 11
bankruptcy protection on 6 January 2009. Sales and operating income
associated with this customer are not material to the Tonnage Gases
segment's results. At 30 June 2009, the Company had remaining
outstanding receivables with the customer of $16.4. At the present
time, the Company does not expect to recognize additional charges
related to this customer. Additionally, the Company recorded a
charge of $9.9 for other asset actions which consisted of the
closure of certain manufacturing facilities. This charge was
reflected in cost of sales on the consolidated income statement.
The customer bankruptcy charge combined with this asset write-down
resulted in a total charge of $32.1 ($21.0 after-tax, or $.10 per
share). 4. PENSION SETTLEMENT The Company's supplemental pension
plan provides for a lump sum benefit payment option at the time of
retirement, or for corporate officers six months after the
participant's retirement date. The Company recognizes pension
settlements when payments exceed the sum of service and interest
cost components of net periodic pension cost of the plan for the
fiscal year. A settlement loss is recognized when the pension
obligation is settled. Based on the timing of when cash payments
were made, the Company recognized an $8.0 ($5.0 after-tax, or $.02
per share) charge in the third quarter of 2009. An additional $2 to
$3 for settlement losses is expected to be recognized in the fourth
quarter of 2009. For the three and nine months ended 30 June 2008,
the Company recognized $1.0 and $28.7 ($17.9 after-tax, or $.08 per
share) of settlement charges, respectively. 5. SUMMARY BY BUSINESS
SEGMENT Three Months Nine Months Ended Ended 30 June 30 June
(Millions of dollars) 2009 2008 2009 2008 ---- ---- ---- ----
Revenues from External Customers Merchant Gases $882.6 $1,087.3
$2,678.2 $3,097.7 Tonnage Gases 565.0 975.8 1,933.6 2,634.1
Electronics and Performance Materials 409.2 579.7 1,148.0 1,656.1
Equipment and Energy 119.4 106.9 367.1 311.9 ----- ----- -----
----- Segment and Consolidated Totals $1,976.2 $2,749.7 $6,126.9
$7,699.8 -------- -------- -------- -------- Operating Income
Merchant Gases $168.8 $204.3 $495.5 $593.3 Tonnage Gases 87.6 125.5
294.4 347.7 Electronics and Performance Materials 39.0 70.4 52.5
204.0 Equipment and Energy 13.1 4.0 36.4 23.3 ---- --- ---- ----
Segment Totals $308.5 $404.2 $878.8 $1,168.3 Global cost reduction
plan (124.0) -- (298.2) -- Customer bankruptcy and asset actions
(32.1) -- (32.1) -- Pension settlement (8.0) (1.0) (8.0) (28.7)
Other (.6) (9.5) (22.2) (16.9) --- ---- ----- ----- Consolidated
Totals $143.8 $393.7 $518.3 $1,122.7 ------ ------ ------ --------
30 June 30 September (Millions of dollars) 2009 2008 ---- ----
Identifiable Assets (a) Merchant Gases $4,729.6 $4,881.6 Tonnage
Gases 3,398.0 3,335.4 Electronics and Performance Materials 2,205.2
2,341.0 Equipment and Energy 304.6 300.2 ----- ----- Segment Totals
10,637.4 10,858.2 Other 765.6 775.2 Discontinued Operations 19.9
115.3 ---- ----- Consolidated Totals $11,422.9 $11,748.7 ---------
--------- (a) Identifiable assets are equal to total assets less
investments in and advances to equity affiliates. RECONCILIATION
NON-GAAP MEASURE The Company utilizes a non-GAAP measure in the
computation of capital expenditures and includes spending
associated with facilities accounted for as capital leases. Certain
facilities that are built to service a specific customer are
accounted for as capital leases in accordance with EITF No. 01-08,
"Determining Whether an Arrangement Contains a Lease," and such
spending is reflected as a use of cash within cash provided by
operating activities. The presentation of this non-GAAP measure is
intended to enhance the usefulness of information by providing a
measure which the Company's management uses internally to evaluate
and manage the Company's capital expenditures. Below is a
reconciliation of capital expenditures on a GAAP basis to a
non-GAAP measure. Three Months Ended Nine Months Ended 30 June 30
June (Millions of dollars) 2009 2008 2009 2008 ---- ---- ---- ----
Capital expenditures - GAAP basis $312.7 $272.4 $930.2 $795.2
Capital lease expenditures under EITF No. 01-08 43.4 36.6 111.6
153.1 ---- ---- ----- ----- Capital expenditures - non-GAAP basis
$356.1 $309.0 $1,041.8 $948.3 ------ ------ -------- ------
DATASOURCE: Air Products CONTACT: Media, Betsy Klebe,
+1-610-481-4697, ; or Investors, Nelson Squires, +1-610-481-7461, ,
both of Air Products Web Site: http://www.airproducts.com/
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